An item buried in Gov. George Pataki's proposed state budget has construction managers fretting that school projects could be held up by budget negotiations.

The Pataki administration, faced with a crush of school construction projects applying for state aid, is attempting to set limits on how the aid is distributed.

But the governor's proposal has clouded schools' current construction plans, observers say. They worry that the critical summer construction season could be lost if the issue gets bogged down in state budget negotiations.

"It causes a lot of uncertainty for our business," said Roel van der Vossen, a director at Sano-Rubin Construction Co. Inc. in Albany. Contractors are making plans now for the summer construction season when schools are closed for vacation, van der Vossen said. He said the governor's school aid proposals, if enacted, might require changes to previously approved construction projects.

Under the current system, the state reimburses school districts for up to 90 percent of construction costs under an open-ended formula. It is one of the most generous state aid programs in the country. The state further sweetened the pot two years ago by adding a 10 percent building aid incentive to the money already available.

In the five years since 1996, school construction aid jumped from $600 million to $1.2 billion, prompting the governor to propose ways to check the spending.

"It changes the rules midstream," said Jeffrey Zogg, managing director of the General Building Contractors of New York State. In school districts across the state, voters have approved projects based on the current state aid formulas. "Now it becomes a real question as to what kind of aid the school district is going to get," Zogg said. "Now they can't be sure and are thinking maybe they should put everything on hold."

For the many construction management firms who do a lot of public school work, "it makes planning difficult," Zogg said.

Mark Breslin, general manager of the Turner Construction Co. office in Albany, said the move "puts a lot of our projects on hold and increases the fear they are going to be delayed."

Turner has $1.3 billion in school construction projects on the books in New York state.

Breslin is part of a lobbying group that includes construction industry officials and school superintendents, which is pushing the governor and the state Legislature to maintain current levels of school construction funding.

The group was encouraged when state Senate Republican leadership came out against Pataki's proposals in early March.

The Republicans' support for maintaining the current funding levels has boosted confidence among school officials and contractors to continue with building plans this summer, said Tom Rogers, deputy executive director of the New York State Council of School Superintendents in Albany.

"We don't sense any enthusiasm in the Legislature" for Pataki's proposals, Rogers said. Although the state Assembly leadership has not taken an official position, Rogers said, "the Senate move was as clear a message as possible to the construction community to proceed."

Kevin Quinn, spokesman for the state Division of the Budget, pointed out that Pataki's 2001-02 budget proposal calls for $1.3 billion to support the cost of new and modernized school buildings. It is the highest in the state's history, and a $170 million increase from the current fiscal year.

"We'll certainly take a look at the Senate's proposal," Quinn said. But he said the governor's proposals for shifting the way the state aid is administered remain on the table. "We're committed to working closely to make sure the adjustments are made as smoothly as possible," he said.

Pataki's budget proposal would replace the current open-ended building aid program with a new priority-based program to help districts with the most outdated buildings and crowded classrooms. The governor would also stretch out payments from the state to school districts over a longer time.

"Unsustainable growth in school construction threatens to exhaust the availability of state resources to support other educational priorities," the budget proposal stated.

In addition, the Pataki budget would alter the ratios of state and local funding for school districts, for projects approved by local voters after Jan. 15 of this year.

This retroactive altering of the ratio of state aid could affect the $303 million in school projects that voters have approved since Jan. 15. The voters approved the projects based on a certain level of guaranteed state aid.

If the school districts have to go back to the voters with modified plans, it may be too late for the work to get done this year, said Zogg of the General Building Contractors. Even if the Legislature resolves the state aid formula issue favorably for the industry, he said, "the summer months could be lost."